What is 'SaaS is Dead'?

The changing form of 'services' in the AI era
Recently, especially in the overseas tech scene, I have been seeing the phrase
'SaaS is Dead'
quite often.

Is SaaS really coming to an end?
Or is this just a sensationalist catchphrase?
Today, I will organize the background, the evolution of AI, and my thoughts on the changes occurring in small and medium-sized enterprises.

1. What does the death of SaaS mean?

First, as a premise, SaaS itself is not going to disappear.
SaaS (Software as a Service) has grown rapidly over the past decade through:
・Subscription-based
・Cloud delivery
・Recurring billing models

Representative examples include:

• Salesforce

• Slack

• Zoom

• Shopify

These have been valued as companies that provide products.
However, the 'death of SaaS' being discussed now implies that the value of SaaS as a standalone tool is declining, and that AI has the potential to replace the UI itself.
In other words, it is not that 'SaaS is dying,' but rather that
the traditional SaaS model is reaching its limits.

2. Structural changes brought about by the evolution of AI

The evolution of generative AI is not just a simple addition of features.

• It can process across UIs

• It can cross-reference APIs

• It can redesign business workflows

For example:

• Opening a CRM to search

• Creating a report in another tool

• Formatting in Excel

This kind of 'moving between tools' could be processed all at once by AI agents.
In other words, we may be shifting from an era of using tools to an era of giving instructions to AI.
SaaS was something you 'operated,' but AI is something you 'command.'
This structural shift is the essence of the 'SaaS is Dead' argument.

3. Changes seen from stock price trends

Around 2021, SaaS companies received extremely high valuations.
ARR growth rate was the most important metric, and it was an era where 'as long as you grow, you will be valued.'
However, since then:

• Rising interest rates

• Growth slowdown

• Pressure to cut costs

have caused the stock prices of many SaaS companies to adjust.
On the other hand, the valuations of AI-related companies are soaring.
Symbolic of this is:

• NVIDIA

Companies that hold the AI foundation are growing rapidly, and the structure where the 'infrastructure layer' is valued more than the 'application layer' is strengthening.
This can be said to be a sign that the market is finding more value in infrastructure than in tools.

4. So what changes for small and medium-sized enterprises?

This is the most important part.
From the perspective of Mobitech Solution, the reality for small and medium-sized enterprises is as follows.

1. SaaS is still necessary

Accounting, attendance, MDM, and groupware.
These are still indispensable.
Especially:

• Microsoft

• Microsoft Intune

Integrated management services like these will only become more important in the future.

2. However, the direction is to reduce the 'number'

From now on,

• not increasing tools
  but

• consolidating

• automating

will become mainstream.
SaaS is Dead can also be called the end of the era of SaaS proliferation.

3. Selection criteria will change

From now on:

• Can it integrate via API?

• Can it connect to AI?

• Can data be exported?

will become important.
The evaluation axis will shift from "looks convenient" to "can it be integrated?"

5. The true meaning of SaaS is Dead

SaaS is Dead is a declaration that the era of local optimization is over.
From here on, we will shift to:

• AI-centric design

• Data-centric design

• Integration-first design

However, it is also a fact that for small and medium-sized enterprises, there is no need to replace everything with AI immediately.
What is important is these three things:

• Reduce the number of SaaS

• Organize management

• Do not scatter data

These are the three.

Summary: SaaS will not die, but it will be forced to evolve

SaaS will not disappear.
However,

• Standalone tool-type SaaS will be weeded out

• SaaS that cannot integrate with AI will struggle

• SaaS that cannot be integrated will no longer be chosen

This future is realistic.
Our proposal as Mobitech Solution is simple.
Before adding more tools, organize what you have.
Before introducing AI, clean up your data structure.
SaaS is Dead is not a story about the end.
This is a signal that
the redesign of IT management has begun.